Convertible Securities and Earnings per Share

Francis Company has 20,000 shares of common stock outstanding during all of 2016. It also has two convertible securities outstanding at the end of 2016. These are:

Convertible preferred stock: 2,000 shares of 9.5%, $50 par, preferred stock were issued on January 2, 2016, for $60 per share. Each share of preferred stock is convertible into 3 shares of common stock. Current dividends have been declared. To date, no preferred stock has been converted.

Convertible bonds: Bonds with a face value of $200,000 and an interest rate of 5.7% were issued at par in 2015. Each $1,000 bond is convertible into 22 shares of common stock. To date, no bonds have been converted.

Francis earned net income of $61,500 during 2016. Its income tax rate is 30%.

Required:

(a) Compute the 2016 diluted earnings per share. Round your answer to two decimal places.

(b) What basic earnings per share amount would Francis report on its 2016 income statement? Round your answer to two decimal places.